Morning briefing: EUR/USD hints at a medium-term downward shift
The EUR/USD pair is currently positioned at 1.1446, signaling potential medium-term bearish pressure on the euro as technical indicators suggest a possible strong dollar rally. With the sentiment scoring pointing to a bullish USD and bearish EUR, the focus shifts to critical support levels that could validate this trend. A breach below these levels would affirm the outlook discussed in the headline, warranting close monitoring from traders and analysts alike.
Where it sits in our coverage
Our current consensus EUR/USD target sits at 1.1634 (median across 12 firms), with firms like RBC and Commerzbank showing stronger bullish stances at 1.1700 and 1.1900, respectively. In contrast, Lloyds and Citi have positioned their targets significantly lower, at 1.1331 and 1.1300, reflecting a more cautious sentiment around the euro's performance.
How firms align
Firms such as HSBC and Nomura align well with the bearish view on the euro, both setting targets at 1.1700 for March 2026, thus reinforcing the current downward pressure narrative. Conversely, Bank of America just recently revised its March target down to 1.1300, which contrasts with the prevailing outlook noted in the headline.
What the data shows
Recent revisions indicate a consensus shift, with UOB adjusting its target for March to 1.1536 while Citi scaled back expectations to 1.1300. Further insights from our research point to growing divergence with the euro's performance based on these updated expectations, detailed in /research/eurusd-ecb-rate-path-2026-10-04.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01Watch for EUR/USD break below 1.1440 to confirm bearish sentiment.
- 02Bearish outlook supported by technical signals; traders should consider key support levels.
- 03Monitor ECB signals to gauge potential shifts in market sentiment.
- 04Recent target adjustments reflect tightening outlook on euro strength.
Market implications
Next key levels to watch will be around 1.1400 and 1.1440, as a decisive break below either could trigger significant dollar buying. Additionally, upcoming economic data from the Eurozone could influence EUR/USD positioning ahead of the ECB meetings.
Risks to this view
A stronger-than-expected economic performance from the Eurozone or any dovish signals from the Fed could invalidate the bearish outlook, particularly if EUR/USD can breach resistance above 1.1500.
Sentiment by currency
USD+EUR JPY~GBP~Composite USD score: +0.65
Sources & References
How we cover this story
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